TXU buyers: No flipping

In the private equity world, a "flip" is a good thing. It means that you have made a ton of money in a short period of time.

And that's why investors put their money into these funds, right?

Well, in the $32 billion buyout of TXU (NYSE: TXU), things are a little more complicated. The private equity buyers -- KKR and the Texas Pacific Group (TPG) -- want to show that they are not greedy operators.

That's not an easy thing to do. Hey, look at Blackstone's $39 billion deal for Equity Office (EOP). A day after the firm bought the company, EOP began unloading assets.

But with TXU the politics will make this almost impossible. As a result, KKR and TPG have agreed that they will not unload the company for at least five years (this is according to The Wall Street Journal).

In the private equity world, this is a long time. But it may be too short for Texan politics.

Interestingly enough, it may not matter anyway. Because of recent initiatives in Texas, it looks like the TXU deal will face few regulatory hurdles anyway.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.